Heathrow turned ‘small profit’ in 2023 after ‘3 consecutive years of losses’

Heathrow turned 'small profit' in 2023 after '3 consecutive years of losses'
Heathrow turned a revenue of almost £3.7mn - up from £2.9mn in 2022 (Image credit: Markus Mainka/Adobe Stock)

Heathrow Airport this week shared its 2023 financial results, declaring a “small profit” after three consecutive years of losses brought on by the coronavirus pandemic.

Reporting a “strong year”, the airport turned a revenue of almost £3.7mn – an increase of 26.6 per cent compared to 2022.

Heathrow also saw passenger numbers recover, having welcomed 79.2 million travellers last year – the third highest in its history.

The airport claims it outperformed “all other European hubs” by being rated the “best airport in Europe” and the “world’s most connected hub”.

Thomas Woldbye, Heathrow’s CEO, said: “2023 was a good year for Heathrow from a challenging start to a great finish.

“We delivered much improved service for our customers, and managed to turn a small profit after three consecutive years of losses.

“That’s a great platform to build on, although in 2024, we are expected to deliver even further improved service to more passengers, but with airport charges cut by 20 per cent in real terms.”

He continued: “We will have to pull every lever to become more efficient and make tough choices on where we spend and invest our money to overcome the huge cost challenge set by the [UK Civil Aviation Authority] and remain profitable over the next three years.”

Heathrow’s 2023 financial results published in full (Source: Heathrow Airport)

The airport aims to hit a target of 81.4 million passengers by the end of this year – more passengers than ever before.

It said a strong performance in the fourth quarter of 2023 helped it reach its first adjusted profit in four years, with £38mn adjusted profit before tax.

Meanwhile, its balance sheet also remains “strong”, with gearing below pre-pandemic levels and £3.8bn of liquidity.

With airport charges reduced in line with the CAA’s H7 settlement, Heathrow stated that “maintaining even a small profit” will require it to close a “£400mn gap” with efficiencies and investment trade-offs over the next three years.

No dividends were paid in 2023, and none are currently forecast for 2024.

And, ahead of the UK government’s spring budget, the airport’s bosses have urged ministers to speed up the delivery a domestic sustainable aviation fuel (SAF) industry, which they said will make the UK a “magnet” for international tourism.

In response to Heathrow’s financial results published this week, Rory Boland, editor of consumer champion Which? Travel, said: “Even with Heathrow recording a significant profit and predicting record passenger numbers, it complains about being unable to hike passenger fees, which are already among the highest in the world.“Heathrow should ensure that passengers are seeing a return on the money they’re already paying.

“While many smaller airports excelled in our recent airport survey and impressed passengers with a good standard of facilities and service, Heathrow failed to shine.

“As the UK’s largest airport, it’s time passengers were put front and centre,” he added.